Tuesday,  Oct 23, 2018,17:24 (GMT+7) 0 0
Thaco invests US$335m in HAGL
By Hung Le
Thursday,  Aug 9, 2018,19:48 (GMT+7)

Thaco invests US$335m in HAGL

By Hung Le

Doan Nguyen Duc (L), chairman of Hoang Anh Gia Lai Group, and Thaco Chairman Tran Ba Duong hold up the documents of their strategic cooperation agreement at an announcement ceremony on August 8 - PHOTO: SI DUNG

HCMC - Truong Hai Auto Corporation (Thaco) and Hoang Anh Gia Lai (HAGL) Group announced their strategic cooperation on August 8, where Thaco will invest VND7.8 trillion (US$335.4 million) to help HAGL repay loans and continue its unfinished projects.

HAGL Chairman Doan Nguyen Duc said Thaco will invest in two HAGL subsidiaries: HAGL Agricultural JSC (HAGL Agrico) and HAGL Myanmar Co., Ltd.

Thaco and its shareholders will invest VND3.8 trillion in HAGL Agrico to own a 35% stake in HAGL.

Thaco will also buy a 51% stake in HAGL Myanmar Co., Ltd., through Dai Quang Minh Real Estate Investment JSC, for VND4 trillion and expected to raise its ownership to 65%. Thaco will be responsible for developing the second phase of HAGL Myanmar, which requires a total investment of US$320 million and is expected to be completed in 2020.

Thaco Chairman Tran Ba Duong pledged to help restructure HAGL by applying advanced technologies to HAGL’s value chains from farming to processing. Thaco will also assist HAGL expand its market for agricultural products to China, Japan, South Korea and Europe.

With total assets of VND53 trillion, HAGL has been operational for more than 25 years in Vietnam, Laos and Cambodia, mainly in the agriculture sector. Its project in Myanmar has created jobs for more than 30,000 workers.

Over the last 10 years, HAGL has invested heavily in rubber plantations. However, rubber prices have plunged, resulting in losses of some VND23 trillion for the group.

Although the group decided to switch to fruit production for export, it has struggled to settle its debts, Duc said.

In addition to the VND7.8 trillion investment, Thaco has pledged to invest VND14 trillion in HAGL to help expand its fruit business and pay debts.

Speaking at the announcement ceremony, Prime Minister Nguyen Xuan Phuc hailed the partnership between the two companies, saying that the Government encourages the application of modern technologies in the agriculture sector. Thaco, with its strong financial capacity and technological advantage, can help HAGL boost its agricultural projects, reported Nguoi Lao Dong newspaper.

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